Waiting for the [tag]stock market[/tag] can be frustrating, however it is quite normal thing. Every experienced [tag]investor[/tag] knows this period and many of them were waiting long time for their [tag]best stock[/tag], which made them their [tag]fortune[/tag]. Read the Boik’s book “How Legendary [tag]Traders[/tag] Made Millions” if you want to know more about other traders during market like this. [tag]Jesse Livermore[/tag] talks about this waiting time as well. Sometimes it happened that Jesse had to wait several months before a [tag]winning stock[/tag] opportunity came to him. He wasn’t the only one. [tag]Nicolas Darvas[/tag] was another [tag]successful investor[/tag] who realized he would rather wait than [tag]investing[/tag] in [tag]bad stock market[/tag]. Jesse Livermore was able [tag]making money[/tag] literary in good market as well as in bad market. Nevertheless he had periods when it was better sit tight in cash and wait. Darvas was the type of investors investing only in bull markets.

This week was hectic and the market was trying to bounce up several times. However only [tag]poor stocks[/tag] were behind those attempts. Most of the leaders didn’t show up and we are back in correction. What’s worse the market probably falls further down as you can see on this chart:

As you can see, the market is attacking its long term [tag]support line[/tag] and it seems it will break it down. Unfortunately, this is not the market anyone should be investing money in. The [tag]dollar cost averaging[/tag] or any other strategies based on [tag]bargain hunting[/tag] will be or may become a disaster to any investor’s [tag]portfolio[/tag].

What to do in this market, though? The best way to do now is to wait. You can work on reducing your debt, [tag]saving more money[/tag] and [tag]study the market[/tag], strategies and [tag]stocks[/tag]. Make yourself ready and prepared for the next upturn.
Some time ago I wrote that I moved all my cash from brokerage account to a savings account and in February 2009 I would move it back and start investing again. Well the market doesn’t look like a friendly buddy and I made my decision to leave my money on the savings account for another 3-months period. I do not have enough money to invest into CDs, bonds or any other money market vehicle yet. Most of them require an initial investment $5,000 or more and my investing account is about a half of that sum. With such a small investing account I need to move it to savings account to accrue some interest (at least something, since on the brokerage account there is no interest or very little one).

Yesterday and today’s [tag]gains[/tag] returned the [tag]stock market[/tag] back to [tag]rally attempt[/tag]. It still is attempting rally and it may fail as it happened couple times ago. It still is not the right time for buying new [tag]stocks[/tag], however this attempt may be the bottom bounce, which puts the market into the [tag]confirmed rally[/tag] and we can start investing again.

The market returned back above its [tag]support line[/tag] today. If it sustains on that level and continues growing, we may be at the bottom finally and the worst things are probably behind us, even though [tag]economists[/tag] and [tag]investing[/tag] columnists may be saying something different. The [tag]economy[/tag] may still be in bad shape, however experts say that the stock market can predict better or worse times six months ahead. If this is our case, we may see our [tag]economy getting better[/tag] in about six months from now. Or the rally is a fake as many others prior this one and it will fail again. We need to wait for the upcoming week or two to see whether the rally sustains and turn into a confirmed rally or not. The [tag]volume[/tag] was weak and only a few [tag]leaders[/tag] could be seen gaining today. Still a [tag]weak market[/tag].

Tip: It is not time to [tag]start investing[/tag] yet. Wait for the [tag]market[/tag] to confirm itself. This rally attempt can still fail next week. I would stay out of the market, watch potential [tag]winning stocks[/tag], add them to a watch list and wait. There always will be plenty of opportunities to [tag]buy winning stocks[/tag] when the rally confirms itself.

Or is it another bounce? Today the [tag]market[/tag] entered into another [tag]rally attempt[/tag], fourth in a row. The market rallied on a new [tag]bank[/tag] [tag]bailout[/tag], which I personally do not like. Banks are receiving excessive monetary help, but can any of you experience any improvement? Did your [tag]interest rate[/tag] go down? Would you be able to get a new [tag]loan[/tag] recently? I talked to couple architects and developers and mostly their response was, that even though they have a very good [tag]credit[/tag] and they have good businesses, banks are reluctant [tag]lending money[/tag]. So what are they doing with the help they received? Buying new Jets?
Nevertheless this may be an impulse for the market propelling upwards and stimulate new growth, even though I am quite suspicious that such bailouts would help to start a sustainable trend.

[tag]Dow[/tag]

+200.00

+2.46%

8,375.45

[tag]Nasdaq[/tag]

+53.44

+3.55%

1,558.34

[tag]S&P[/tag]

+28.38

+3.36%

874.09

All [tag]indexes[/tag] are still below their [tag]50 day MA[/tag] and far below [tag]200 day MA[/tag] indicators. It still is not the right time to [tag]start investing[/tag]. I am still waiting in [tag]cash[/tag] for the next move, watching the market, [tag]stocks[/tag] and [tag]saving money[/tag] for future confirmed rally. There are no stocks, which would fit my picking criteria anyway.

The [tag]stock market[/tag] seems to be bouncing at the bottom. When looking at the [tag]chart[/tag], the stock market failed two [tag]rally attempt[/tag]s and it seems like it cannot fall through its virtual [tag]support line[/tag]. Is it really a bottom, from which the market would be able to jump up? Or is it just bouncing like a ping-pong ball on the table just to fall further down over the edge of the table?
Let’s see what the next couple weeks bring us.